China faces many challenges that with deft leadership it may overcome. But, the toughest challenge is demographic. China is aging fast, and it will be tough for it to get rich before it old. The Economist has done its usual terrific job of describing the biggest challenge that will face starting with ‘China’s Achilles heel: A comparison with America reveals a deep flaw in China’s model of growth‘:
This trend will have profound financial and social consequences. Most obviously, it means China will have a bulge of pensioners before it has developed the means of looking after them. Unlike the rest of the developed world, China will grow old before it gets rich. Currently, 8.2% of China’s total population is over 65. The equivalent figure in America is 13%. By 2050, China’s share will be 26%, higher than in America.
Complementing the article is this video: